Succinct Summation of the Week's Events

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Succinct Summation of the Week’s Events:

Positives,

1)Initial jobless claims were little changed w/o/w at 224k vs 225k (revised up by 2k). That was about as expected. Continuing claims fell to 1.856mm, down from 1.881mm and below the estimate of 1.886mm.

2)The March US manufacturing and services composite PMI rose to 53.5 from 51.6. It was all led though by the services sector which rose to 54.3 from 51 while manufacturing fell back below 50 at 49.8 from 52.7.

3)Personal income rose .8% m/o/m which was double the estimate, partly offset by a 2 tenths downward revision to January. Private sector wages/salaries in particular rose .5% m/o/m and by 3.2% y/o/y vs 3.9% in January. Transfer payments continue to drive the headline income beat with a 2.2% m/o/m gain after a 1.8% jump in the month before. Medicaid payments especially were up sharply within this. Combine both income and spending and the savings rate rose to 4.6% from 4.3% and that is the most since June 2024 but still pretty low.

4)Pending home sales in February rose 2% m/o/m after a 4.6% drop in January and a 4.2% decline in December which took this index to a record low since it started. That was just above the estimate of up 1%. The gain was led almost entirely by the 6.2% increase in sales in the South which followed a 9.2% fall in the month before (blame the weather?). Sales fell in the West and Northeast and were up slightly in the Midwest. The NAR said it as it is, “Despite the modest monthly increase, contract signings remain well below normal historical levels.”

5)New home sales in February totaled 676k, about as expected and up from 664k last month.

6)The Apartment List National Report for March and said its new rent index rose .6% m/o/m, up for a 2nd month and helped by seasonality. The index though is still down .4% y/o/y "but is slowly inching back toward positive territory." The supply side continues to be the issue with rent growth, particularly in the Sunbelt states with the vacancy rate rising to 6.9%, up one tenth m/o/m. Austin is the softest market. They said "2024 saw the most new apartment completions since the mid-1908s, and with 750k units still in the construction pipeline, the supply boom has runway to continue this year."

7)Within the durable goods report, core shipments, which get plugged into GDP, jumped by .9%, well above the estimate of up .2%. This is likely due to the rush to get product before tariffs but will lift Q1 GDP estimates.